Indian garment exporters feel Britain's exit from the EU would significantly dilute the relevance of the FTA they have with EU. So they want a separate trade treaty with Britain since they feel this will significantly boost garment exports to the UK. The EU is a major destination for Indian readymade garments, with the UK a leading market. Europe makes up 46 per cent of apparel exports, of which Britain's share is a huge 40 per cent.

India currently enjoys a 12.5 per cent tariff preference in the EU under its GSP (generalised scheme of preferences) program. The export sop would now be impacted for textile shipments to the UK.

India has approved a Rs 6000-crores special package for the textile and apparel sectors. The aim is to create one crore textile jobs within three years, generate investments worth 11 billion dollars and 30 billion dollars in exports.

These incentives would enable Indian exporters to price their products much better than countries such as Bangladesh and Vietnam, which have low labor costs. They would also help Indian textile exporters to enter China and Southeast Asia. The fact is that while Europe is an important market for exporters, it is more or less saturated, and so they are interested in entering China and southeast Asia, which have a market for high-end products.